Gibson Brands, Inc., today announced that it has signed an agreement with Royal Philips to acquire WOOX Innovations, Philips' audio, video, multimedia and accessories business.

Under the terms of the agreement, Nashville-based Gibson will pay $135 million and a brand license fee, relating to a license agreement for an initial period of seven years, according to a release. The deal is expected to close in the second half of the year, subject to customary conditions, including regulatory filings and works council procedures.

The video business will stay with Philips until a transfer to Gibson in 2017. Until that time, a distribution agreement will be in place, whereby WOOX Innovations will be responsible for the marketing and sales of Philips-branded optical video products.

In the release, Gibson said the transaction with Royal Philips will leverage Gibson’s market presence in the U.S. and Japan, and WOOX Innovations’ market strength with Philips-branded audio and home entertainment products in Europe, China and Latin America.

“This agreement is the most significant step yet in Gibson Brands’ journey to become the largest music and sound technology company in the world,” Henry Juszkiewicz (pictured), Gibson Brands chairman and CEO, said in the release. “By acquiring Philips’ audio and home entertainment business, our goal is to continue to provide the most exceptional consumer audio products and experiences in the world.”

Relatedly, Gibson has in recent years invested in audio brands including Onkyo (read here) and TEAC.